GRAVY

I put the following questions to
SARS:A few years ago I bought a house,
as my own residential property to
be used by myself and my family, for
R3m. A few years later the company
that employs me – I happen to be its
executive chairman – spent R30m on
improvements to it.

Is the R30m tax free or am I liable
for tax at my maximum marginal
rate? What are the consequences if I
haven’t declared the R30m as deemed
income?

In the unlikely event that I
get answers from SARS, my next
question will be whether the same
law applies to all taxpayers.

So long as government scratches for money, which will be long
indeed, it will be looking for new
revenue sources (like a prescribed-assets
imposition on pension funds,
not for infrastructure investment
but to fund current expenditures)
and new taxes (like a wealth tax, not
to “reduce inequalities” but to fund
current expenditures).

Better to ensure first of all that
what’s already owed is promptly
paid; like Nkandla, whose owner
(and the public) will get no rest until
it is. The local government elections
are upon us....

Talking about the President, who isn’t too keen on the Public
Protector, his attitude towards her
is reminiscent of the retort by Stalin
when it was suggested to him that
the support of the Pope be enlisted to
fight the Nazis.

“How many legions has he got?” asked the master bully.

In its corporate governance statement, the newly-listed Sygnia
financial services group makes much
play of its compliance with corporate
governance “principals”.

The start would have had more
polish – no, not Polish – had it
known how to spell the word.

Be that as it may, the Sygnia pre-listing statement shows
the 2015 remuneration of well-photographed
executive Magda
Wierzycka (she of the long blonde
hair) at a relatively modest R3,9m
inclusive of a R900k bonus. But
modesty tells only part of the story.

Magda beneficially owns 84,6%
of Sygnia. On the group’s JSE listing
in October, the value of her shares
stood at over R1,4bn. She should
worry if it makes multi-manager
rivals turn grey.

Given this windfall, watch for strengthened competition
in the multi-manager space. In
particular, watch for developments at
Discovery.

In the old apartheid dispensation, a Cape Town businessman
classified as ‘Coloured’ told his
accountant (classified ‘White’) that
he wouldn’t pay tax for so long as
he was a second-class citizen. Come
the demise of apartheid and the
accountant called the businessman
to say that he no longer had an
excuse for not paying tax.

“On the contrary,” responded
the businessman. “We’re now both
second-class citizens.”